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Ever since its launch in 2009, bitcoin (BTC) has made headlines and drawn interest from tech enthusiasts and investors. The cryptocurrency has seen multiple meteoric rises, jumping from less than $500 in 2013 to more than $64,000 by 2021.
After a major decline from those heights, bitcoin dropped below $17,000 in 2022. However, the crypto has since rallied, even surpassing $50,000 on February 12, which has led has many investors to wonder if bitcoin could rise above its historical highs and reach six figures.
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When Will Bitcoin Hit $100,000?
No one knows for sure whether bitcoin will rise or fall in value over the coming days, weeks, months or years. However, one way to guess at future price changes is to consider BTC’s previous price movements.
In January 2014, bitcoin was worth approximately $800. By January 2024, it was worth more than $42,000. That represents a price increase of better than 5,150% and an annualized return of more than 135% per year over the past decade.
If bitcoin experiences that same rate of appreciation in its average annual returns, it will reach $98,700 in January 2025 and hit $100,000 in February of that same year.
Some experts believe bitcoin could increase in value even more quickly. Frank Holmes, executive chairman of data center builder and operator HIVE Digital Technologies, says, “We could potentially see its price double over the next 12 months to 4x.”
Matt Hougan, chief investment officer at Bitwise, also believes bitcoin could see major price increases this year. He says, “We think bitcoin is in a multi-year bull market and is likely to set new all-time highs this year.”
Of course, this is a simplification of bitcoin’s potential price movements. Cryptocurrency is incredibly volatile and that decade of 135% annualized returns saw multiple instances where bitcoin lost half of its value or more in a short time and didn’t return to previous highs for months or years.
Why Might the Price of Bitcoin Rise?
There are a handful of developments that could cause a rise in bitcoin’s price.
Spot Bitcoin ETFs
On January 10, the U.S. Securities and Exchange Commission approved the first spot bitcoin ETFs.
The approval of those new ETFs allows providers to create ETFs that directly purchase and hold bitcoin on behalf of investors. That allows investors to trade BTC at its current, or spot price. Previously, ETFs could only trade bitcoin futures contracts.
Futures are complex derivatives instruments appropriate for trading only by experienced investors.
Many investors believe spot ETF approval could increase bitcoin’s accessibility as an investment and draw in investors who did not own bitcoin simply due to the complexity of buying crypto.
“Bitcoin’s price is set by supply and demand. Currently, we have a massive new source [of] demand from the launch of bitcoin ETFs,” Hougan says.
The Bitcoin Halving
When it comes to BTC’s supply, there’s another factor in play as well. Bitcoin is about to undergo another halving.
Bitcoin functions through a decentralized network of computers working to validate transactions. Those computers are said to be ‘mining’ bitcoin. When a block of transactions is validated by generating the correct cryptographic solution, the miner who solved it is rewarded with new bitcoin.
There is a cap of 21 million bitcoins that will ever be produced, and every so often the amount of bitcoin awarded for validating a block is halved. There is no set date for the next halving—it depends on how many blocks are validated. But estimates place the next halving sometime in May 2024.
Halving will reduce the supply of new bitcoin entering the market, and halving events have historically increased trade volume and demand for bitcoin.
“In April, we’ll see the flow of new supply coming into the market reduced by approximately $7 billion per year. New sources of demand and a cut in new supply is a pretty great set-up,” Hougan says.
Layer-2 Solutions
The final price catalyst behind bitcoin right now is Layer-2 solutions, which have given the bitcoin network more scalability and means of use.
Previously, the bitcoin network could only be used to mine and move bitcoins between wallets. It was a digital ledger for a single cryptocurrency. However, now it can be used in other ways, such as for smart contracts or decentralized applications.
These additional applications give more functionality to the bitcoin network, potentially increasing its overall value.
Could Bitcoin Crash Again?
Bitcoin has a history of extreme volatility. When it launched, bitcoin was worth pennies, and it was worth only a handful of dollars for many years after that.
However, since then the coin has gone through significant price swings.
It fell from a high of $60,000 in April 2021 to below $30,000 by July of that same year. Then, bitcoin rose back to an all-time high of $65,000 that November before bottoming out around $16,000 at the end of 2022.
Howard Hook, a CFP and CPA with Princeton, New Jersey-based EKS Associates, says a bitcoin crash could come for a few reasons. “One of the greatest risks that could cause Bitcoin to lose value or crash again are regulatory issues… Other issues could simply be another coin comes along and replaces Bitcoin as the most widely known,” says Hook.
“The finicky nature of any asset whose value is not based on anything tangible can lose value just because a whole lot of people decide today is the day to sell.”
Holmes says, “I always remind investors that government policies are a precursor to change. With that being said, one big risk to the price of bitcoin is anti-crypto legislation.”
Bitcoin’s Environmental Impact
Concerns over bitcoin’s environmental impact could also lead to further regulation or a move toward other cryptocurrencies for many investors.
In 2022, bitcoin was using 150 terawatt-hours of electricity each year—equivalent to the entire population of Argentina—and emitting 65 megatons of carbon dioxide each year.
Does Bitcoin Still Have Any Upside?
On February 12, the price of one BTC broke through the $50,000 level once again. However, this is still well below the cryptocurrency’s all-time high of more than $64,000, and it’s reasonable to believe that bitcoin could reach that height once more.
Interest from government regulators and major players in the financial industry lends credence to the idea that crypto could be here to stay.
The cryptocurrency market is maturing. When Bitcoin launched in 2009, it was the first of a brand new asset class, known only to a few and accessible only to the relatively tech-savvy.
Fast forward to today, and there are thousands of cryptocurrencies on the market with market capitalizations in the tens or hundreds of billions. While other recently launched digital assets, such as NFTs, have come and gone, cryptocurrency has lasted more than 15 years and despite some significant volatility, has grown massively in value.
Should You Invest in Bitcoin?
Given its historic returns, bitcoin could be an appealing investment. Recent developments, such as the creation and sale of spot bitcoin ETFs, mean that it is easier than ever for investors to add the cryptocurrency to their portfolio.
For some, the diversification and potential returns are worth the risk.
“Bitcoin, like gold, can be attractive for investors to consider as [a strategy for] diversifying portfolio assets,” Holmes says.
“Last summer, Bloomberg did a study asking over 600 investors which assets they would prefer to own if the U.S. hit the debt ceiling and defaulted on its obligations. Bitcoin was the number three asset on the list, following gold and Treasuries.”
It’s important to keep in mind, however, that the risks for cryptocurrencies are significant. Although bitcoin has been around for more than 15 years, it’s still a young asset class. For this reason, it can be hard to know if bitcoin will still be around and popular a decade from now, and if it is, what it will be worth.
Hook says everyday investors should stay away. “The asset itself is speculative in nature. While it is being used as a digital currency, much if not all of the price of the coin is the speculative nature of what it could be,” Hook says.
Hougan, however, says that crypto presents a good opportunity. “There is no reward without risk,” Hougan says. “In bitcoin, there’s typically plenty of both.”
Frequently Asked Questions (FAQs)
What other cryptocurrencies might gain value in 2024?
The cryptocurrency market is incredibly diverse, and today there are thousands of different cryptos to choose from. Bitcoin is the largest by far. But other major players such as ethereum (ETH), solana (SOL) and XRP (XRP) have seen significant price increases in the past few years, and they could see even more gains in the future.
How does trading bitcoin differ from trading other securities?
Cryptocurrencies are very different from traditional securities like stocks or ETFs. Stocks, for example, represent a share of ownership in a company and its physical assets. Cryptocurrency, on the other hand, is not physical. It only exists on the blockchain.
Another major difference between cryptocurrencies and many other investment classes is that you can only trade most securities while the market is open, usually between 9:30 a.m. and 4 p.m. eastern time on business days. Crypto markets are open 24/7.
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